Banking watchdogs issue stark AI warnings

Financial Times UK

8 Jul 2026

OLAF STORBECK AND FLORIAN MÜLLER — FRANKFURT MARTIN ARNOLD — LONDON

The Eurozone’s chief banking supervisor Claudia Buch yesterday wrote to 110

lenders giving them until the end of October to come up with a “comprehensive

action plan” to combat the cyber risks posed by state of the art AI models.

In a separate warning, the European Systemic Risk Board said modern AI models

could undermine nancial stability across the Eurozone as hackers could use them

to automate highly complex attacks cheaply, while banks remain bogged down by

regulatory requirements, legacy IT systems and slow updates from software providers.

The concerns were echoed by the Bank of England, which yesterday warned that

rapid advances in frontier AI capabilities had “increased nancial stability risks

related to cyber and operational resilience”.

However, BoE governor Andrew Bailey said: “We are taking a different approach.

We are working very closely with the banks, because . . . it is not about issuing

edicts.”

Global regulators have been alarmed by a new generation of AI models capable of

nding huge numbers of previously hidden IT weaknesses.

The ESRB, which is responsible for monitoring and preventing threats to the

European nancial system, said the latest AI models represent “a paradigm shift for

cyber security” as IT weaknesses could now be “weaponised” in a “matter of

minutes or hours”. It raised its assessment of systemic cyber risk to “severe” from

“elevated”.

Anthropic was the rst AI company to face White House export restrictions over

concerns its technology could be used to exploit security vulnerabilities in critical

infrastructure. Restrictions on its leading models were lifted last week after it

agreed to extra safeguards.

Bailey urged the US to co-operate with other countries on AI. “These models are a

big step forward in terms of capabilities and the threat issue is a really major step

forward,” he said.

“No single country can think that it can solve that resilience problem on its own.”Buch said lenders’ action plans should include “concrete measures to strengthen

relevant controls, allocating the necessary resources, assigning clear roles and responsibilities and defining timeliness for implementation. 


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